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Let's celebrate what Xerox PARC did invent—and invest in more invention

So much has been written recently about what Xerox’s famed Palo Alto Research Center (PARC) did not invent that it is worth remembering what PARC did invent.

While we’re at it, let’s also topple the conventional wisdom that Xerox PARC was a commercial failure. Xerox PARC was an immense success. Far from proving that large companies should not invest in breakthrough research, Xerox PARC shows that they must. That is a lesson of immediate urgency for Apple, Facebook, and every other market leader in technology-intensive industries.

The issue of what Xerox PARC did not invent was stirred up by a WSJ column last week by Gordon Crovitz, who attributed the invention of the Internet to Xerox PARC. This was not the case, as thousands in the blogosphere have risen up to point out (including several notable figures whom Crovitz had cited to buttress his point).

Consider, instead, what Xerox PARC did invent. Over five glorious years starting in 1971, researchers at PARC invented many of the core elements of information technology:

It is safe to say, nearly four decades later, that most of the information-technology industry and much of global commerce still depend on these 8.5 inventions.* Technology companies and many others in downstream industries have collectively realized trillions of dollars in revenues and tens of trillions in market value because of them.

It’s true—and here’s where conventional wisdom constantly chimes in—that Xerox realized very little of these trillions. As Steve Jobs famously observed, “Xerox could have owned the entire computer industry… could have been the IBM of the nineties… could have been the Microsoft of the nineties.” But, of course, Xerox wasn’t.

It has become commonplace for executives and pundits to cite Xerox’s “failure” to commercialize PARC’s inventions as part of their rationale for not investing in breakthrough-oriented research. “Innovation” is celebrated, but “invention” is frowned upon in many organizations.

But consider this: The budget for the parts of Xerox PARC that focused on computing in 1974 was less than $3 million. Those 8.5 inventions cost about $10 million in total—about $43 million in today’s dollars.